Budget…the word connotes something negative, restrictive, designed to ruin our fun. I have found, though, that living with a budget is freeing. Once we established a budget and started living within that budget, we were able to waste less and do more.
It doesn’t really matter how much money you make. Provided you have enough for the essentials in life, food, clothing and shelter, the rest is just a matter of living within your means. Someone who makes $100,000 a year, but spends $100,100 will have a much more stressful life financially than someone who makes $50,000, but only spends $49,900.
I have our budget set up on a spreadsheet (yes I am that girl). I have a line in the budget for everything that we spend money on. Obviously, we include rent, groceries and all the bills in our budget. I also include a line for beer, eating out, getting my hair done, our monthly adventures, Christmas and of course savings. Savings is at the top of our budget, just under the rent. We make savings a priority and money designated for savings is never considered when we make decisions about new expenses.
We also have a number of methods that we use to save money. One of those is our use of credit cards. While credit cards can damage your financial health, when used properly they are beneficial. First of all, properly using a credit card can help your credit score. We have cards that offer cashback bonuses. We pay most of our bills with our credit cards to take advantage of this perk. We pay our cards off completely every month so that we never pay any interest. We do have a few cards that we carry a balance on, but they are zero interest (for a limited time) cards. We use these for major expenses instead of digging into our savings. We pay those cards off before the end of the zero-interest period. We use the cashback rewards as our Christmas fund.
My favorite savings tool is Ibotta. It is an app that offers rebates for items that you buy at stores, restaurants and online. They offer bonuses in addition to the regular rebates. This money we also put towards our Christmas fund. Between the cash back on our credit cards and our Ibotta rebates, we paid for our entire Christmas last year. If you would like to get in on the savings you can sign up at Ibotta. This link will let you sign up using my referral code. If you use it I will get compensated for the referral. You can also just download the app or go to their website to sign up without the referral.
The best part of living with a budget is we always know where we stand financially. Before we go out to dinner, we know whether we have the money to go or not. We can also readjust the budget as necessary to add new expenses or drop those that we no longer need. Our budget keeps our life simple, financially easy to navigate and allows us the freedom to do what we want to in life.
Yes, I need to redo my budget because circumstances have changed since I started one awhile ago. I love how you all add savings to your budget. I’m going to include that in mine. Thx for sharing.
That’s why I love using a spreadsheet for our budget…it is so easy to make adjustments as needed. I never understood budgeting for savings when I was younger, but now that we are in the habit of saving it has become pretty easy to do. The nice thing is that if we have an emergency come up, we don’t have to sweat how we are going to be able to handle it because we always have a cushion.
Nick and I implemented a budget right after we left American Income, because we knew we would have to be more “frugal” with our money. We actually made a spreadsheet as well after you recommended that to us 🙂 Definitely a great idea!